ANSWERS TO QUESTIONS

If the expected annual growth rate of dividends is 4%, calculate the cost of equity capital. Solution: Cost of capital 2.4.3 Example 4. D Co is about to pay a dividend of 15c. Shareholders expect dividends to grow at 6% pa. D Co’s current share price is $1.25. ... Assume that taxation is payable at the end of the year in which taxable profits ... ................
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